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October 24, 2023
(Bloomberg) — Prime Minister Justin Trudeau and his cabinet are planning a multibillion-dollar loan program to help Indigenous groups in Canada buy equity in resource projects. But the government is still debating whether to include the oil and gas sector within it.
The program, which is expected to be announced in the coming weeks, will see the government provide guarantees for loans to Indigenous organizations, using Canada’s AAA credit rating to negotiate better terms for credit. First Nations often have difficulty securing loans because they can’t use the federal land they control as collateral, and some don’t have long credit histories.
Trudeau’s government sees the loan plan as a tool for improving the economic prospects of Indigenous communities, which suffer from higher rates of poverty than the rest of Canada. The loans may be used for buying stakes in mines, power plants, transmission lines and a range of other projects — including many seen as critical to achieving Canada’s climate goals.
But the government is still wrestling with whether fossil fuel projects should be eligible, and if so, under what terms. Government backing for the oil and gas sector has frequently divided Trudeau’s cabinet, as some ministers push for a harder line on climate policy — particularly Quebec-based members such as Environment Minister Steven Guilbeault, a former Greenpeace activist.